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January 23, 2014

Advisor-Owners: Be Sure to Provide Constructive Criticism to Employees

One of the hardest jobs any manager has is giving constructive feedback to employees on their performance. It seems especially hard for advisors, who usually have little or no management training, and often view having employees as a necessary burden in order to do their “real” job: working with clients. Perhaps the most difficult situation that advisors and other managers face is when an employee reacts badly to constructive criticism.

No matter how constructive, you never know how people will react to a critique of their work, and some just don’t take it well. Crying, arguing, shouting and even swearing aren’t unusual responses. When this happens, my best advice to advisors and managers is to don’t let the response—no matter how negative—stop you from continuing to give that employee honest assessments of their job performance: that’s your job and the future of your clients and your firm depends on it.

The first challenge in facing these negative reactions is not to make things worse by over-reacting yourself. As soon as it’s clear that a constructive discussion isn’t going to happen, it’s time to break off the conversation. At this point, here’s no need to offer any further comment on the employee’s performance or their reaction: Just a simple exit line such as: “Well, please think about what I’ve said,” will do.

Once the confrontation is over, it’s a good idea to review your own performance, to determine if you did anything to warrant such a response. Were your comments intended to help the employee do better, or were you just abusive? Overly critical? Profane? Condescending? Simply wrong in your assessment? Perhaps surprisingly, poor employee relations are the easiest to fix when the manager is at fault: Because that’s something the manager can control.

For conversations where the manager was the problem, I usually recommend being aware of one’s behavior, and making every effort not to repeat your mistake. I’ve found that apologizing to the employee is rarely helpful, and can sometime lead to another bad conversation. What employees really want is to be treated fairly and with respect, so just behaving properly in the future is usually the best response.

While manager problems are the easiest to deal with, the tougher situation is when the employee overreacted to reasonable feedback delivered in a supportive way.

If it was the first the employee acted this way or their response was unusual for them, then maybe they were just having a bad day—as we all do. (Employee tip: if you did overreact to reasonable criticism due to personal reasons, it’s probably a good idea to briefly apologize for your behavior and let your boss know that you do understand their comments and will try to do better.)

However, when you have an employee who just doesn’t handle constructive criticism well, you have a real problem. Owner-advisors often view their employees as they do their friends, or their children, or even their spouses—engaging in intense introspection when the relationship goes wrong. Was I caring enough? What can I do to fix this?

It’s important to remember that employees are mature adults who are responsible for their own actions. We don’t have control over how others react. Moreover, when we try to exert that kind of control, we usually just end up being controlled.

Once you’re sure you were constructive, the best course of action is to do nothing. Don’t stop giving them constructive feedback, and most important, don’t have a conversation with the employee about their reactions. If an employee can’t take constructive criticism, I’ve found that having a conversation isn’t going to change anything; way more often, it will just create a deeper division between you.

If the situation continues, it’s time to reevaluate the employee’s value to your firm. This is the employee’s problem, not your problem. (Note to employees: if you don’t respond to helpful input about your work, you need to find a way to deal with it, before it hurts your career.) Firm owners have a responsibility to their other employees and to themselves to maintain a happy, cooperative, productive working environment. Chances are that someone who can’t accept their mistakes and shortcomings, and learn from them, is not going to improve their performance and grow with the firm.

Most advisory firms can’t afford the luxury of employees who don’t fit into their culture.